Why Bitcoin Could Become Zimbabwe’s New National Currency

The Zimbabwean 100 trillion dollar bill had 14 zeros.

That’s the highest number written on any legal tender in all recorded history.

But in 2009, you’d still need a bucket full of them to buy a bus fare. And by the time you’d carried it to the station, the ticket price may have doubled, leaving you stranded.

This level of hyperinflation exemplifies the sheer recklessness of central banks and governments. When your wealth is anchored to a failing economic system, there’s nothing to stop you from sinking along with it.

In this instance, the hard earned savings of Zimbabwe’s population suddenly ceased to have any value. And after inflation hit 79.6 billion percent, the Zimbabwean dollar was revoked, leaving the country devastated and with no currency of its own.

The President who oversaw this economic catastrophe was Robert Mugabe — the man of the hour.

Mugabe has been dominating the headlines recently, after the military seized control of the country on Wednesday.

But at 93 years old and hitting his fourth decade in power, Mugabe’s house arrest might provide him with some valuable some time to reflect.

The people are fed up, and have been for a long time. The uncertainty about the country’s future is palpable.

But one thing is certain. The people were not going to be left economically stranded this time around.

In the midst of this political turmoil, Zimbabweans have found an escape pod in the form of bitcoin.

As reported by Bloomberg on Wednesday:

‘The price of the cryptocurrency in the Southern African nation jumped as high as $13,499, almost double the rate at which it trades in international markets, according to prices cited on Golix’s website. It traded at $13,010 by 3:34 p.m. in Harare, the Zimbabwean capital.’ 

Clearly, Zimbabwe is now a hub for cryptocurrencies to thrive. And the nation may well be the guinea pig for how smoothly cryptos can replace the fiat system.

As bitcoin allows people to bypass the sticky fingers of the middleman, transactions are clean, fast and peer-to-peer. With the potential to level the playing field for the most vulnerable individuals, it’s no wonder they’re loathed by banks and governments alike.

So while central bankers have been scrambling to argue that cryptocurrency will never replace the fiat system, it’s been happening before our eyes.

Bitcoin is the definitely one of the key cryptos leading this revolution. But it’s not the only one.

Our tech expert Sam Volkering has recommended a rival cryptocurrency that could potentially see exponential growth. It’s relatively unknown right now — a hidden gem, much like bitcoin was in 2009. But a pivotal event coming on 30 November will thrust this crypto into the spotlight, and consequently, the mainstream.

If you’re clued-up before then, you can stand on the sidelines with your retirement fund, while the ‘next bitcoin’ turns the world upside down. To avoid letting this opportunity pass you by, click here.

This week in Markets and Money

On Monday, the relentless tirade of Amazon news continued. For the past 18 months, we’ve been bombarded with headlines outlining how Amazon is going to crush our retail industry. But as Shae points out, all of this free advertising given to the retailer by the Australian media won’t be enough. Despite the media rumours, Amazon gaining the kind of popularity it has in the US won’t be a piece of cake. With the Aussie online shopping sector still in its infancy, Amazon will have to work hard, and fast, to win us over.

To read the full story, click here.

On Tuesday, Härje had his eye on a popular Chinese trend. It’s not often that being single is celebrated, especially not with an annual shopping day. But in China it’s one of the biggest online retail events of the year, thanks to the ‘generosity’ of a few ecommerce giants. On the back of cash-strapped millennials, these businesses are now making millions from consumer loans. With money being given out fast and no questions asked, the threat this poses to banks has already become a reality in China. And if a few large tech companies follow suit, it may soon be a reality here too.

To read the full story, click here.

On Wednesday, the deputy governor of the RBA hinted at what interest rates would look like in 2018. As Shae rightfully noted, the aftermath of 2008 saw Aussies become infatuated with interest rate movements. And considering it has been eight years since the last cash rate increase, the guessing game of when it’s going to rise next has become somewhat of a national sport. But as the governor noted, there’s one sector that’s holding the RBA back. Consequently, all bets are off for an increase in 2018.

To read the full story, click here.

On Thursday, Shae explored the reasons why billionaires are starting to get involved in bitcoin. Major fund management firms and their managers are falling over themselves to get on the crypto train. Most would chalk this newfound interest up to bitcoin’s huge price gain this year. However, it’s not the coins themselves, but the technology behind them that’s enticing. Blockchain is completely revolutionising how data is stored and analysed. And with the upcoming launch of a new index which tracks blockchain related companies, you too can take advantage of the tech disruption about to come.

To read the full story, click here.

On Friday, Vern drew the comparison between the unhealthy habits of bodybuilders and our financial system. Using unnatural means, or debt, to bulk up our economy will eventually result in an unhealthy system. And while injecting this outside cash may create the appearance of a strong market, a closer look reveals it’s all a façade. Australia’s economy is starting to show signs of this debt fatigue — a condition that could have serious consequences if it’s not cured soon.

To read the full story, click here.


Katie Johnson,

For Markets & Money

Katherine Johnson, usually going by just ‘Katie’, is a member of Port Phillip Publishing’s editorial team, as well as the Editor of the Saturday edition of Markets & Money. Katie works with all of your editors to maintain the quality of their research and analysis. In her Saturday Markets & Money articles she specialises in cryptocurrency and technology stories, and brings you a recap of the week from your other Markets and Money editors.

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